China has imposed export restrictions on 14 European companies involved in the processing of critical minerals, escalating ongoing trade tensions linked to rare-earth elements and other strategic materials. The announcement by China’s Ministry of Commerce on Friday follows similar sanctions placed last month on two American firms central to efforts in developing a U.S. supply chain for rare-earth magnets.

The new restrictions bar shipments of “dual-use” materials and products—items China identifies as having both civilian and military applications—to the targeted European companies. These materials, which include rare-earth metals as well as minerals like tungsten and antimony, are essential components in manufacturing advanced technologies such as semiconductors, rare-earth magnets, electric vehicles, offshore wind turbines, robots, and drones.

China’s move comes a day after the European Union sanctioned 14 firms in mainland China and Hong Kong for their alleged involvement in Russia’s military-industrial complex and for enabling the circumvention of EU sanctions related to Russia’s invasion of Ukraine. The European sanctions also targeted 24 Russian companies and 10 other entities worldwide.

Among the European companies affected by China’s export controls are Germany’s Rheinmetall, the country’s largest defense contractor, which plays a key role in Germany’s military rearmament efforts following Russia’s 2022 invasion of Ukraine. Tungsten and rare-earth elements, which are vital in producing military hardware, are heavily utilized in Rheinmetall’s work. Other companies on the list include Germany’s Sindlhauser Materials, a producer of yttrium alloys used in advanced semiconductor manufacturing, and Italy’s Lafert Group, a prominent maker of electric motors containing rare-earth magnets critical for industrial robotics and factory automation.

China’s dominance in the rare-earth metals sector has been a growing source of geopolitical leverage. Nearly all global capacity for processing rare-earth metals and converting them into high-performance alloys is concentrated in China. The country has progressively tightened export restrictions: since late 2024, it imposed controls on tungsten, antimony, gallium, and germanium, followed by restrictions last year on seven types of rare-earth metals. Beijing also plans to enforce further export limits on five additional rare-earth elements in the coming months.

Western efforts to develop independent supply chains for critical minerals remain at an early stage. Both the U.S. and the EU are investing in domestic mining and refining capabilities to reduce reliance on Chinese suppliers, but the complex and often environmentally challenging processes involved limit rapid expansion.

European firms affected by the latest round of Chinese export curbs tend to be small and medium-sized enterprises with specialized expertise that is scarce outside China, heightening concerns about disruptions in the supply of critical mineral components. Industry groups such as the European Union Chamber of Commerce in China have criticized the broad application of China’s “dual-use” criteria, which they argue lacks transparency and hampers trade.

Neither Rheinmetall nor Lafert responded immediately to requests for comment, and Sindlhauser declined to comment on the restrictions. China has also pushed multinational companies to relocate supply chains within its borders, allowing unrestricted exports of finished electric motors containing rare-earth magnets while limiting the export of the magnets themselves. This policy underscores Beijing’s strategy of integrating foreign manufacturers into its controlled rare-earth ecosystem amid intensifying geopolitical competition.